HR3161-119

What This Bill Does

The Preventing Environmental Hazards Act adds a new National Flood Insurance Act subsection for insured structures along lakes or other bodies of water that state or local authorities condemn or deem unsafe for habitation because of imminent collapse or subsidence from shoreline erosion, or determine are partly or wholly over water, a shoreline bluff, an escarpment, or below Mean Higher High Water. After FEMA's final compliance determination, flood insurance may pay demolition in two stages: 40 percent of the structure value before demolition and the remaining 60 percent or actual demolition cost, whichever is less, after demolition including septic containment systems within six months and before collapse. Owners choosing relocation may receive up to 40 percent of value before collapse, capped by actual relocation cost. If the owner fails to take reasonable and prudent action and the structure collapses or six months pass, payment is limited. Value is the lowest of comparable fair market value, inflation-adjusted purchase and improvement price, or policy value; total payment may not exceed coverage or 250,000 dollars; contents are excluded. Structures must already have NFIP coverage, generally for 12 months before enactment or four continuous years before certification, and subsequent NFIP or disaster assistance for the same structure or remaining parcel is barred except emergency assistance. FEMA must issue regulations and guidelines.

Who Benefits and How

Owners of insured shoreline homes benefit because NFIP can help pay for demolition or relocation before collapse creates a public hazard. Coastal and lakeshore communities benefit when unsafe structures and septic systems are removed before falling into water or down eroding bluffs. Local building officials benefit from a federal payment mechanism tied to condemnation or unsafe-habitation determinations. Environmental protection agencies benefit indirectly because pre-collapse demolition or relocation can prevent debris and septic contamination.

Who Bears the Burden and How

FEMA NFIP administrators must write regulations, make final compliance determinations, value structures, and police payment caps. Property owners must demolish or relocate within six months and before collapse to receive full payment. NFIP policyholders collectively bear program costs for pre-collapse demolition or relocation coverage. Future parcel owners lose access to later NFIP or disaster assistance for the same structure or remaining parcel after payment.

Key Provisions

• Creates NFIP demolition and relocation coverage for insured structures facing imminent collapse, subsidence, erosion, or water encroachment.
• Provides staged demolition payments of 40 percent before work and up to 60 percent after timely demolition.
• Provides relocation payments up to 40 percent of structure value and actual relocation cost.
• Caps payments at policy coverage or 250,000 dollars and excludes contents.
• Requires prior NFIP coverage and bars future flood or disaster assistance for the same structure or parcel after payment.